Food-Processing-Plant-Design-layout

Food Processing Plant Design & layout
Now the break-even point is defined to be the point or volume where the total costs equal
total revenue. Thus for each site Sl and S2, the break-even point can be determined by using
a simple formula as follows:
Break-even volume (BEP) =
Total fixed costs
Revenue per unit – Unit‟s variable costs
At the South Delhi Location S1
40,00,000
BEP =
75,000-30,000
88.88 89 tonnes
and at the South Mumbai location S2
60,00,000
BEP =
82,000-24,000
103.448 104 tonnes
Let us see what would be the profit or loss for the two sites at the expected volume of 95
tonnes. The calculations are shown in the following Table.
Table Cost comparisons
South Delhi (S1)
South Mumbai (S2)
Costs
Fixed : 40,00,000
Variable: 28,50,000
Total : 68,50,000
Costs
Fixed : 60,00,000
Variable : 22,80,000
Total : 82,80,000
Revenue: 75,000 x 95 = 71 ,25,000 Revenue: 82,000 x 95 = 77,90,000
Profit :
= (71 ,25,000 - 68,50,000) = 2,75,000
Loss :
= (77,90,000 - 82,80,000) = 4,90,000
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